The Liberal Democrats have unveiled the plans for their ‘help to rent’ scheme, which would allow people aged between 18 and 30 years to borrow money from the government in order to be able to afford the deposit when renting their first home.
The loans will be for those in full-time employment, and they can borrow up to £1,500 or £2,000 for those living in London. This money can then be used for the deposit, which is usually the same cost as a month or six weeks’ rent. They are also not allowed to be homeowners, or looking for a social housing tenancy.
The loans will be repaid automatically, over a time period of either 12 or 24 months, and the Lib Dems expect as many as 1.8 million people to use this help to rent scheme. It has been estimated that approximately £2 billion could be loaned out during the first year of the scheme.
Nick Clegg, the leader of the Liberal Democrats, said: “You’ve got this generation that is sometimes called the ‘clipped wing generation’, or ‘the boomerang generation’, of an increasingly large numbers of youngsters – I think the estimates are now about 2m people in their 20s and 30s – who simply can’t find the money needed for a deposit to rent a flat or home of their own.”
The main political parties have been busy unveiling their housing plans, for if they are successful in the upcoming general election. The Conservative party intend to run a help to buy ISA, whilst Labour has pledged to introduce tenancy agreements lasting three years, in a bid to make evictions more difficult.